I was working hard, making a lot of progress and getting praise from my
manager and co-workers. One day I read an article on the Internet saying that
competition in the microelectronics industry had intensified and companies should look at
various options to remain successful. I showed the article to my manager and asked for his
opinion. His response was “not to worry and keep up the good work”. Of course I expected more
from my manager, but I noticed that him and other first line managers at IBM were so much
involved with just managing their direct reports and waiting for a directive from above on what
to do, so they rarely if ever took initiative to propose any anticipatory changes or tuning.
In March 2002 Sam Palmisano became the CEO of the company. He joined IBM in 1973 as a
salesman in Baltimore and later moved up the ranks as senior managing director of operations
for IBM Japan, senior vice president for the personal systems group, the enterprise systems
group and IBM global services, and president and chief operating officer. Shortly thereafter,
when IBM Microelectronics announced its financial results for the first quarter of 2002, multi-
million losses were revealed. Unfortunately, the senior management didn’t or couldn’t do much
to anticipate this, so now everyone was waiting what the new CEO would do in this difficult
business situation. At that point of time only reactive changes could be made. Instead of
adaptation, which in my opinion required a lot more skills from Palmisano, he chose re-creation.
What was his solution? Massive job cuts. In June of 2002 approximately 1,500 out of 7,000
employees were laid off in Burlington and I was one of them. Workers piled their belongings in
cardboard boxes and left the office for good, collecting pay for the next 60 days. Among 1,500
employees who were laid off there was a substantial number of new hires who joined the
company just a little bit more than a year ago. All of the sudden, from the greatest asset people
became something that can be easily dispose of in order to cut costs.
